At the same time, as held by
this Court in the case of G.K. Bhatnagar v. Abdul Alim, (2002) 9 SCC 516 and Helper Girdharbhai v. Saiyed Mohmad Mirasaheb
Kadri, (1987) 3 SCC 538, where a tenant becomes a partner of a
partnership firm and allows the firm to carry on business in the
premises while he himself retains the legal possession thereof,
the act of the tenant does not amount to subletting.
It is further
observed and held that however inducting the partner in his
business or profession by the tenant is permitted so long as such
partnership is genuine. It is further observed that if the purpose
of such partnership is ostensible in carrying on business or
profession in a partnership but the real purpose in subletting
such premises to such other person who is inducted ostensibly
as a partner then the same shall be deemed to be an act of subletting.
After considering catena of decisions of this Court on
subletting,
in the case of Celina Coelho Pereira v. Ulhas
Mahabaleshwar Kholkar, (2010) 1 SCC 217, this Court has
summarised in paragraph 25 as under:
“25. The legal position that emerges from the aforesaid decisions
can be summarised thus :
(i) In order to prove mischief of subletting as a ground for eviction
under rent control laws, two ingredients have to be established,
(one) parting with possession of tenancy or part of it by tenant in
favour of a third party with exclusive right of possession and (two)
that such parting with possession has been done without the
consent of the landlord and in lieu of compensation or rent.
(ii) Inducting a partner or partners in the business or profession by
a tenant by itself does not amount to subletting. However, if the
purpose of such partnership is ostensible and a deed of
partnership is drawn to conceal the real transaction of subletting,
the court may tear the veil of partnership to find out the real
nature of transaction entered into by the tenant.
(iii) The existence of deed of partnership between tenant and
alleged subtenant
or ostensible transaction in any other form
would not preclude the landlord from bringing on record material
and circumstances, by adducing evidence or by means of crossexamination,
making out a case of subletting
or parting with
possession in tenancy premises by the tenant in favour of a third
person.
(iv) If tenant is actively associated with the partnership business
and retains the control over the tenancy premises with him, may
be along with partners, the tenant may not be said to have parted
with possession.
(v) Initial burden of proving subletting is on landlord but once he
is able to establish that a third party is in exclusive possession of
the premises and that tenant has no legal possession of the
tenanted premises, the onus shifts to tenant to prove the nature of
occupation of such third party and that he (tenant) continues to
hold legal possession in tenancy premises.
(vi) In other words, initial burden lying on landlord would stand
discharged by adducing prima facie proof of the fact that a party
other than tenant was in exclusive possession of the premises. A
presumption of subletting
may then be raised and would amount
to proof unless rebutted.”
9. Applying the law laid down by this Court in the aforesaid
decisions to the facts of the case on hand and on appreciation of
evidence on record, we are of the opinion that there is no
genuine partnership between respondent no.1 and respondent
no.2. Respondent no.1 has come out with a case of partnership
only to get out from the allegation of subletting.
The exclusive
possession of the suit premises is with respondent no.2.
Respondent no.2 is running the business in the suit premises as
an owner. Sales Tax Certificate and the licence are in the name
of respondent no.2. The bank accounts are in the name of
respondent no.2 and respondent no.2 is exclusively dealing with
the bank accounts. Under the circumstances, a clear case of
subletting
has been made out. The High Court has committed
a grave error in setting aside the decree of eviction on the ground
of subletting.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 9443 OF 2019
A.MAHALAKSHMI Vs BALA VENKATRAM
M.R. SHAH, J.
Dated:JANUARY 07, 2020.
Citation: AIR 2020 SC 322
Print Page
this Court in the case of G.K. Bhatnagar v. Abdul Alim, (2002) 9 SCC 516 and Helper Girdharbhai v. Saiyed Mohmad Mirasaheb
Kadri, (1987) 3 SCC 538, where a tenant becomes a partner of a
partnership firm and allows the firm to carry on business in the
premises while he himself retains the legal possession thereof,
the act of the tenant does not amount to subletting.
It is further
observed and held that however inducting the partner in his
business or profession by the tenant is permitted so long as such
partnership is genuine. It is further observed that if the purpose
of such partnership is ostensible in carrying on business or
profession in a partnership but the real purpose in subletting
such premises to such other person who is inducted ostensibly
as a partner then the same shall be deemed to be an act of subletting.
After considering catena of decisions of this Court on
subletting,
in the case of Celina Coelho Pereira v. Ulhas
Mahabaleshwar Kholkar, (2010) 1 SCC 217, this Court has
summarised in paragraph 25 as under:
“25. The legal position that emerges from the aforesaid decisions
can be summarised thus :
(i) In order to prove mischief of subletting as a ground for eviction
under rent control laws, two ingredients have to be established,
(one) parting with possession of tenancy or part of it by tenant in
favour of a third party with exclusive right of possession and (two)
that such parting with possession has been done without the
consent of the landlord and in lieu of compensation or rent.
(ii) Inducting a partner or partners in the business or profession by
a tenant by itself does not amount to subletting. However, if the
purpose of such partnership is ostensible and a deed of
partnership is drawn to conceal the real transaction of subletting,
the court may tear the veil of partnership to find out the real
nature of transaction entered into by the tenant.
(iii) The existence of deed of partnership between tenant and
alleged subtenant
or ostensible transaction in any other form
would not preclude the landlord from bringing on record material
and circumstances, by adducing evidence or by means of crossexamination,
making out a case of subletting
or parting with
possession in tenancy premises by the tenant in favour of a third
person.
(iv) If tenant is actively associated with the partnership business
and retains the control over the tenancy premises with him, may
be along with partners, the tenant may not be said to have parted
with possession.
(v) Initial burden of proving subletting is on landlord but once he
is able to establish that a third party is in exclusive possession of
the premises and that tenant has no legal possession of the
tenanted premises, the onus shifts to tenant to prove the nature of
occupation of such third party and that he (tenant) continues to
hold legal possession in tenancy premises.
(vi) In other words, initial burden lying on landlord would stand
discharged by adducing prima facie proof of the fact that a party
other than tenant was in exclusive possession of the premises. A
presumption of subletting
may then be raised and would amount
to proof unless rebutted.”
9. Applying the law laid down by this Court in the aforesaid
decisions to the facts of the case on hand and on appreciation of
evidence on record, we are of the opinion that there is no
genuine partnership between respondent no.1 and respondent
no.2. Respondent no.1 has come out with a case of partnership
only to get out from the allegation of subletting.
The exclusive
possession of the suit premises is with respondent no.2.
Respondent no.2 is running the business in the suit premises as
an owner. Sales Tax Certificate and the licence are in the name
of respondent no.2. The bank accounts are in the name of
respondent no.2 and respondent no.2 is exclusively dealing with
the bank accounts. Under the circumstances, a clear case of
subletting
has been made out. The High Court has committed
a grave error in setting aside the decree of eviction on the ground
of subletting.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 9443 OF 2019
A.MAHALAKSHMI Vs BALA VENKATRAM
M.R. SHAH, J.
Dated:JANUARY 07, 2020.
Citation: AIR 2020 SC 322
